Engines Done Right Co. is trying to establish the standard labor cost of a typical engine tune-up. The following data have been collected from time and motion studies conducted over the past month. Actual time spent on the tune-up 1.0 hour Hourly wage rate $16 Payroll taxes 10% of wage rate Setup and downtime 10% of actual labor time Cleanup and rest periods 20% of actual labor time Fringe benefits 25% of wage rate If a tune-up took 1.5 hours at the standard hourly rate, what was the direct labor quantity variance? Identify whether the variance is favorite or unfavorite?
Engines Done Right Co. is trying to establish the
Actual time spent on the tune-up 1.0 hour
Hourly wage rate $16
Payroll taxes 10% of wage rate
Setup and downtime 10% of actual labor time
Cleanup and rest periods 20% of actual labor time
If a tune-up took 1.5 hours at the standard hourly rate, what was the direct labor quantity variance? Identify whether the variance is favorite or unfavorite?
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